Text: Unknown philosopher
Unknown philosopher
It's hard to imagine that just one store can sell more than 300,000 people a day.
But what people didn't expect at all was that
This brand has been losing money in the mainland for 3 consecutive years.
The amount of loss is even more in the billion, nearly 1 billion in three years.
Is it because of the poor management of the brand?
Or is there a huge problem with the brand's operation?
Domino's has a huge loophole
Since the introduction of pizza to the mainland, many children and adults have been accurately captured by its unique texture and rich flavor.
For many children, pizza is one of the best dishes.
But when many people think of pizza, they can only think of Pizza Hut first, but in fact, the forgotten Domino's is the pizza brother.
Domino's has a history of 64 years, and in 2017, Domino's surpassed Pizza Hut in terms of market capitalization to become the world's No. 1. But after coming to the mainland, the strength was steadily overwhelmed by Pizza Hut, and there are still many people who only hear about Pizza Hut and don't know Domino's.
In November 2023, Domino's finally got on a hot search, or the news that "after coming to China, it was revealed that it had lost 900 million yuan for three consecutive years", which is undoubtedly a joke for a company that has reached the top of the industry.
Too much foreign fast food has entered China and has become unadaptable, which is not the only thing. Although everyone has it, Domino's has only been adapting to the soil for a longer time.
(Source: Domino's China Prospectus)
Domino's is not adaptable
Adaptation is not a difficult thing for many big foreign brands to solve. Many big brands inevitably have to go through such a threshold, and many big foreign brands have gradually adapted after experiencing several pains in the domestic market.
For example, McDonald's, KFC, and Pizza Hut, which we know some time ago, all occupy a high position in China's catering market, which also shows that foreign fast food can be very popular.
Domino's is not universal in taste, like KFC, some people can immediately think of spicy chicken thigh burgers, and many people love to eat them. But Domino's didn't have a few pizza options that would be universally accepted.
For example, some netizens said that the salted egg yolk taste was too sweet and greasy, and said that they felt that it was not worth it for what they ate at that time.
Netizens also have a lot of different ideas about the same product, if you can collect the evaluation of the corresponding consumer groups in each store for menu adjustment, I believe it will also get better results.
The comments of netizens can also easily see that in fact, everyone's tastes are not the same, and some flavors are not suitable for many consumers, which requires Domino's to adjust itself and give more choices.
Domino's did not make adjustments to the "regional food culture that has emerged in the vast area" of the mainland itself, and it would be a mistake to directly promote it to the whole country just because it felt that a certain place was already very successful.
In many cases, it is not taken into account that the tastes of different regions are not the same.
Like KFC's spicy chicken leg burger, many people eat it, and basically in addition to not eating spicy food, they can think that this burger made by KFC is the most delicious.
But KFC can also take care of the needs of people who can't eat spicy food, and launched the equally popular crispy chicken leg burger and garden burger, and KFC's fame naturally went out.
Although Domino's currently has many products that are also delicious, there is no such popular flagship product, which is very detrimental to opening up a new consumer market, and consumers will be dazzled by new things that they have not been exposed to and options that are not different, and ultimately do not make a good choice.
All brands should pay attention to the upgrading of products, Domino's products have not been introduced in time, and many popular flavors in China have not been added in time.
Like the cow that gives a good pail of milk, and then kicks it over?
Domino's failed for the same reason as the reason why it was able to achieve world No. 1?
Domino's is the first in the world to achieve the slogan "30 minutes must be delivered, if it is not delivered, it is free". But it is also this slogan that has made Domino's have been deeply suppressed in China.
Domino's employment costs are high, accounting for almost half of Domino's total revenue. Among them, the cost of delivery personnel accounts for the highest proportion.
According to Domino's employee statistics at the end of 2022, Domino's stores and central kitchen level employees alone have 14,126 employees, accounting for 97%, while the company's management personnel are only 406, accounting for only 3%.
Domino's delivery advantage is actually becoming more and more inconspicuous in China's gradually maturing food delivery industry, and many of the specialized express delivery services such as KFC home delivery, which I had often heard about before, have also been adjusted in time.
However, Domino's is very "dead-eyed" and always insists on "perseverance in 30 minutes", which leads to a big tail.
This also makes the delivery speed faster and faster, and people naturally avoid this pizza shop when they order the next time they order because they often can't eat it.
And there are many times when delivery is unavoidably slow, and it's not hard to think of the crisis of trust that will arise. In order to avoid 30 minutes of non-delivery, there may be a situation where the delivery time may be changed in the background.
Because of the requirement of 30 minutes, Domino's took the initiative to give up a lot of food delivery ranges. No matter how good it is to operate in a small area, it is really not in line with the momentum of the world's first pizza brother, and this is equivalent to giving up directly for more profit margins.
Domino's "one step late".
Domino's has been ranked third or fourth in China's pizza industry for many years. What's more, Domino's came to China and was still one step later than Pizza Hut.
Judging from the previous data, Domino's only ranks third in the Chinese market, far lower than the first-place Pizza Hut, which is even nearly 7 times the market share of Domino's.
(Source: Dash Prospectus, Essence International)
And Domino's has only 750 stores in China, and even Domino's is not seen in many cities, in stark contrast, Pizza Hut basically has it in every city, and it has covered the third and fourth tier cities, with 3,072 stores across the country.
Source: Internal reference of restaurant company owners
Therefore, when children want to eat "foreign fast food", they can think of Pizza Hut, which is the result of Pizza Hut entering the Chinese market 7 years earlier than Domino's and spending a lot of money on layout.
In fact, Pizza Hut's main service focus is on large family dinners, which are closer to dinners.
And in the top four lists, Pizza Hut is not cost-effective, and the price is more expensive, but it is still well advertised, and most people will think of it when they choose it, and feel that such a big brand is more trustworthy.
As the second place in the market of Zumbo pizza is mainly in South China, Guangdong direct stores more than 1000, the brand positioning is similar, all focus on their own take-out methods, many stores and Domino's are very small, but Zumbao's cost performance is better, so Zumbo has more advantages than Domino's.
The reason why Domino's is not popular in the Chinese market is very obvious, there is no better cost performance, there is no good publicity, its main taste also needs to cater to Chinese taste, and its own exclusive slogan "fast delivery" can not be used.
Domino's suddenly "shameful"?
In November 2022, when the outside world was still sighing at Domino's "900 million for 3 consecutive years", Domino's relied on the Xi'an store to achieve a shame.
On the first day of opening a store in Xi'an on December 24, 2023, it broke the global store first-day sales record, and also posted a good first-day turnover of 320,000 on the official website.
The source is Domino's official website
This blockbuster news also shocked many netizens, and sighed: "Isn't this quite popular?", is it a "fake" that it was previously revealed that stores in China have lost 900 million yuan in three years?
It's not that simple. Shaanxi is a big province that loves to eat steamed buns, and the appearance of Domino's is "the right one" for Shaanxi people who love this mouthful.
The grand occasion of the day also gave the pizza brother a sense of reality that he was still a "first brother".
After the explosion in Xi'an, more and more people tried Domino's pizza and loved it. It also shows that Domino's still has "some ability".
Why is the response of the store in Xi'an so good? This actually shows that Domino's Pizza is competitive in the market, but it has not made good efforts, otherwise it would not have achieved good results in a second-tier city.
The Xi'an branch is not a short-term "sunset afterglow", but it has not been properly promoted, as the world's number one pizza king, the Chinese only know that Pizza Hut may not be Domino's publicity failure.
It can also be seen from the statements of many netizens that many people have a strong interest in Domino's pizza.
In fact, there are many places that want Domino's to drive over, and netizens are also calling for "Domino's come quickly" on the Internet.
Dalmae's "first brother" road
Domino's family history is the same as many self-made stories? In fact, Domino's started out as a small broken pizzeria, and in 1960, a couple of young people in the United States who wanted to start a business took over a small pizza shop because they had no funds.
In order to improve their careers as soon as possible, the brothers got up early every day and worked late at night, and slowly gathered popularity, but because the start-up capital was too small, the store was not very large.
The brothers didn't want customers to eat in the store and chose to take out, so Tom started researching takeout.
In order to facilitate delivery, Tom began to modify the menu and sorted out all the products except pizza, so that the weekly turnover directly increased by 7 times after the operation, which made Tom strengthen his confidence to do a good job in the delivery business.
In order to provide customers with a better and faster dining experience, Tom continued to simplify the production process and customize special thick packaging boxes for pizza insulation, and it took only 9 years to achieve 14 stores.
Delivery has become Domino's best trump card, so Domino's has taken advantage of the trend to play the slogan "discount if it is not delivered in 30 minutes", which is a good slogan for Domino's to continue to expand the chain and go global.
Domino's achieved 1,900 stores worldwide in just 24 years with this slogan, and it was successfully launched at the same time.
Domino's success is not unfounded, as of January 1, 2023, Domino's has more than 90 markets around the world, in many countries and regions. The number of stores owned is a staggering 19,800, and it continues to open today.
(Image source: Dash share prospectus)
With net income of more than $4.5 billion in fiscal 2022, Domino's has no one to worry about when it comes to funding. And the past Sinina stock husband is not weak. In the world market, Domino's strength is undoubted.
epilogue
The success of the Xi'an store is not necessarily a flash in the pan for Domino's, as the pizza king itself has no shortage of financial hard power, it is not too difficult to screen out more cities like Xi'an that welcome Domino's.
Not all stores are suitable for delivery, and a two-pronged approach can be implemented in some cities, so that it can not only develop in all aspects, but also increase market share.
I believe that Domino's hard power is enough to support Domino's not to go out of business in China, but if such a pizza "brother" can make adjustments, I believe that the results will not be the only one store in Xi'an.
Do you like to eat Domino's?
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